The Bank of Canada is expected to hold borrowing costs fixed this morning, pausing its hiking path. Markets are anticipating policy makers will hold this week and leave the benchmark overnight interest rate at 1.5%, before raising again as early as October. Canada is also set to produce figures on trade and labour productivity today.
Canadian Prime Minister Trudeau is fixed on two key issues that have become sticking points in NAFTA negotiations. Unless an agreement can be reached on anti-dumping panels and exemptions for Canadian cultural industries then the current deal could be rejected entirely. Canadian Foreign Affairs Minister Chrystia Freeland is in Washington today to continue talks as President Trump threatens to walk away.
Emerging market currencies are weakening again this morning, with South Africa’s rand and Indonesia’s rupiah suffering major impediments. Additionally, Argentina, Brazil and Turkey are suffering their own crises in response to reduction in global dollar liquidity from a tightening US Federal Reserve.
Oil prices fell on Wednesday, reversing a strong jump from the previous day as the effect of a tropical storm on US Gulf Coast production was not as strong as initially expected. West Texas Intermediate crude futures were at $69.07/barrel this morning.